The market demand curve and the market supply curve of rice are given by:
qD = 450 – p for 0<p<450
qS = 150 + p
What will be equilibrium price?
Answer & explanation
Correct answer: option 1
The correct answwer is option 1: 150
Since at equilibrium price market clears, we find the equilibrium price by equating market demand and supply and solve for p.
$Q_d$ = $Q_s$
450-p = 150+ p
300 = 2p
150 = p
Thus, the equilibrium price is 150.